Writing code is now easier than ever before, but a wholly different aspect of their business could help some software firms escape the disruption — for now.
Sebastian Siemiatkowski, the co-founder and CEO of Swedish fintech giant Klarna, has argued that the cost of creating software is on an inexorable march toward zero, a shift he says he has been convinced of for years. But his more pointed observation was about what comes next: a reckoning over data that could reshape the entire SaaS landscape.
“The cost of creating software is going down to zero. That’s it,” Siemiatkowski said on the 20VC podcast. “Everyone will be able to generate software at any point in time. It is a massive change. I was a hundred percent convicted about this already when I saw this one or two years ago. That’s been very clear to me.”
When the podcast’s host pushed him on what that means for business value — asking how we determine which companies have sustaining value versus which do not — Siemiatkowski’s answer cut straight to the heart of where the next competitive battleground lies.
“So far, the only thing that’s gone down to — or not to zero yet, but become extremely much cheaper — is the generation of software,” he said. “The next thing that’s going to hit everyone hard is the switching cost of data, because what you’re seeing so far is proprietary data stuck in, for example, the CRM vendor or other software-as-a-service that you’re currently using.”
The scenario he describes is one many enterprise customers know intimately: you can replicate a dashboard or rebuild a workflow in a new tool, but years of operational data remains locked inside the incumbent vendor’s system, structured according to their data model and their setup. Migrating it has historically meant enormous cost, risk, and downtime — a powerful disincentive to switch, and an equally powerful shield for incumbents.
But Siemiatkowski believes that shield is about to be tested. “What’s going to happen is people are going to start solving that problem — how do I get all of my data from the existing vendor and move it to the new vendor, with the help of AI, through one click? That brings down switching cost. And that’s when the real threat to SaaS comes.”
The implications are significant. For decades, the SaaS business model has benefited from a two-layered moat: the stickiness of workflow integration, and the friction of data migration. As AI continues to erode the first layer by making it trivially easy to rebuild any software feature, the data layer is becoming the last line of defence. But if AI-powered migration tools begin to commoditise that too — automatically mapping one vendor’s data schema to another’s, cleaning and porting records with minimal human involvement — the durability of even that moat comes into question.
Klarna has been one of the early movers in the AI space. As far back as early 2024, it had created an AI customer service agent that was doing the work of 700 humans. The same year, it had said that it had stopped hiring humans entirely because of the gains it was seeing from AI.
And there are already early signs that data switching might be the next big thing in AI. A wave of startups has emerged offering AI-assisted data migration tools targeting enterprise workloads, and hyperscalers including Google and Microsoft have invested heavily in interoperability initiatives that make it easier to move data across platforms. Meanwhile, the EU’s Data Act, which came into force in 2024, includes provisions designed to ease vendor switching by requiring data portability in certain contexts — a regulatory push that aligns squarely with the dynamic Siemiatkowski is describing. In a world where software is cheap to build, the businesses that will endure are those that find ways to make their data — and the relationships and processes encoded within it — genuinely hard to replicate and move. Until AI makes that easy too, of course.